Well, it seems I was a bit too optimistic in my post in September, but who could have foreseen the Omicrom situation, coupled with record-setting low inventory levels. We really thought that we were easing out of the worst of the escalating market, but here we are in February 2022, just coming out of another lock-down and we are back in the realm of high prices and bidding wars.
The lack of inventory is being fueled by the usual decrease that we see in the winter months, coupled with the situation whereby anyone selling is at risk of not being able to buy their next home. In the past year or two, there were a lot of people liquidating rental and investment properties to take advantage of higher prices, as well as others selling their primary residences and moving to their recreational homes, along with the usual trade-up or down transactions - keeping inventory moving, albeit quickly and for very high prices. It feels like those inventory sources have dried up, and while there are people who want to down-size or up-size, they are not listing due to a very reasonable concern that there will not be a home available to move in to. Additionally, they may get a premium price for their sale, but will also pay a premium price for their purchase. It's a real Catch-22 and it's a challenging time for buyers.
The predicted BOC increases, intended to moderate inflation, will initally have the most impact on the most vunerable sectors of the real estate market (first time buyers, etc) and probably won't be felt until people who maxed out their borrowing power have to re-finance. Depending on how quickly and how significant the increases are, it may be a while before we see anything resembling a balanced market again.
Don't loosen your seatbelt yet!
REAL ESTATE BROKER
REAL ESTATE BROKER
Location
9225 County Rd 93 Unit 5A
Midland, ON, L4R 4K4